By Phil Stewart

MILAN (Reuters) - Prime Minister Silvio Berlusconi can be called to testify in a trial of U.S. and Italian spies accused of kidnapping a terrorism suspect in Milan and flying him to Egypt, a Milan judge ruled on Wednesday.

Berlusconi is not accused of any crime and would appear as a witness in a case that has embarrassed Rome and Washington. Italy's former spy chief says classified documents prove his innocence, and wants Berlusconi to confirm their existence.

The 71-year-old Italian prime minister would become the first head of government in the world to testify in criminal proceedings over secret U.S. transfers of terrorism suspects, known as "extraordinary renditions".

His lawyer Niccolo Ghedini told Reuters he thought Berlusconi's testimony would be "superfluous."

"It is not a great idea and this trial risks undermining national security," Ghedini said.

Judge Oscar Magi ruled that former prime minister Romano Prodi, who handed over to Berlusconi last week, can also be called to testify.

Twenty-six Americans, nearly all of them believed to be CIA agents, are being tried in absentia on charges of kidnapping an Egyptian-born imam in 2003.

Prosecutors say a CIA-led team kidnapped Hassan Mustafa Osama Nasr off the streets of Milan and secretly flew him to Egypt. There, Nasr says he was tortured under questioning and held for years without charge before being released in 2007.

"I was tortured for 14 and a half months ... I suffer now from heart and kidney problems. I have psychological problems," Nasr told Reuters on Tuesday in the Egyptian city of Alexandria.

Nasr faces an arrest warrant in Italy on suspicion of terrorist activity.

WIFE TAKES THE STAND

His wife, Nabila Ghali, took the stand, wearing a black veil covering her face except for her eyes. She wept when asked to recount tortures endured by her husband which she said included electric shocks to his body and genitals.

The judge made her raise her veil behind a screen to verify her identity but he also had photographers and television cameras leave the court room to respect her religious objections to having pictures of her taken.

Ghali described her frantic search for news of Nasr's whereabouts after he went missing on February 17, 2003 as he was on his way to pray at a Milan mosque.

"I tried his cell phone and nobody answered. I asked my son to call (friends from the mosque) and they told me they hadn't seen him that day," she said, speaking through a translator.

She said that whenever she spoke to Italian police "they always told me they didn't know anything".

Berlusconi, now beginning his third term, was prime minister when Nasr disappeared and has defended the Italian spy agency against accusations of wrongdoing.

A strong ally of U.S. President George W. Bush, Berlusconi has denied knowledge of any kidnapping plan but has also opposed the trial, arguing it could hurt Italy's reputation in the global intelligence community.

Italy's former spy chief, Gen. Nicolo Pollari, wants Berlusconi and other past officials to testify about classified documents he says prove he had nothing to do with the Nasr case.

His lawyer Titta Madia said Berlusconi and Prodi would be obliged to give evidence if called.

The judge noted, however, that his ruling on evidence from Berlusconi and Prodi could be rendered irrelevant by a parallel case in Italy's constitutional court.

That court is weighing whether state secrecy rules were violated by the prosecutors investigating the case -- something Italy's government hopes will invalidate the renditions trial.

(Additional reporting by Alaa Shahine in Egypt; Editing by Janet Lawrence)